This paper aims to study the effects of order of market entry on market share in prescription (Rx) and over‐the‐counter (OTC) pharmaceutical drugs market.
Data on sales, price, direct‐to‐physicians (DTP) advertising, and direct‐to‐consumers (DTC) advertising for three Rx drugs categories and two OTC drugs categories were obtained for the period, January 1998 to December 1999. A log‐log statistical model was estimated using OLS methodology.
There is a significant order of entry effect on market share in both Rx and OTC drugs categories. This effect is higher in magnitude in the OTC category than in the Rx category. The effects of price, and DTP and DTC advertising are also significant. The differential effects of DTP and DTC advertising in the Rx and OTC categories are intuitive.
This study is unique in studying the differential effects of order‐of‐entry, and DTP and DTC advertising on market share in Rx and OTC drugs product categories.
